BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 907| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 907 Author: Evans (D) Amended: 5/3/11 Vote: 21 SENATE GOVERNANCE & FINANCE COMMITTEE : 6-2, 4/27/11 AYES: Wolk, Huff, DeSaulnier, Hancock, Hernandez, Liu NOES: Fuller, La Malfa NO VOTE RECORDED: Kehoe SENATE APPROPRIATIONS COMMITTEE : 6-3, 5/26/11 AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg NOES: Walters, Emmerson, Runner SUBJECT : Master Plan for Infrastructure Financing and Development Commission SOURCE : Author DIGEST : This bill creates the 11-member Master Plan for Infrastructure Financing and Development Commission. By December 1, 2013, the Commission must submit a final report to the Governor and the Legislature which contains a long-term plan and strategy for the state's infrastructure needs and a prioritized plan to meet those needs. The Commission must also submit periodic progress reports. ANALYSIS : Existing law requires the governor to annually submit a five-year infrastructure plan to the Legislature. CONTINUED SB 907 Page 2 The plan must contain Identification of infrastructure requested by agencies; aggregate funding for transportation; infrastructure needs for K-12 education; instructional facility needs for UC, CSU, and the Community Colleges; and the cost of providing the infrastructure, sources of funding, and impact on the state's debt position This bill creates the 11-member Master Plan for Infrastructure Financing and Development Commission. By December 1, 2013, the Commission must submit a final report to the Governor and the Legislature which contains a long-term plan and strategy for the state's infrastructure needs and a prioritized plan to meet those needs. The Commission must also submit periodic progress reports. The Commission dissolves 30 days after it issues its final report. Further, this bill's provisions automatically terminate when the Commission dissolves, unless legislators extend the date. The Commission's plan must: Project population, social, and economic trends through 2050. Identify the type and distribution of infrastructure needed through 2050. Incorporate the findings of existing state infrastructure plans and reports. Assess the state's capital needs for infrastructure projects through 2050, including private capital and public financing. Assess the availability of private and public funds for joint projects through 2050. Recommend a financing plan for capital needs through 2050, by five-year intervals, along with feasible financing methods. The Commission must recommend a method to track the state's infrastructure progress and periodically reassess the master plan. The Commission's final report must contain a plan that identifies the types, distribution, and priority for developing infrastructure projects through 2050, and a CONTINUED SB 907 Page 3 measureable process to implement this plan. The plan must also include a process to periodically adjust these projects to meet changing circumstances. When developing its recommendations, the Commission must use existing state and local reports on infrastructure needs. This bill specifically lists: The Governor's annual, five-year infrastructure plan. The State Environmental Goals and Policy Report. The California Transportation Plan. The sustainable communities strategies. Greenhouse gas emissions reduction planning. The California Water Plan. The Commission consists of: 1.The State Treasurer or a designee with a public finance background. 2.Six members appointed by the Governor: A representative from organized labor. A representative from a statewide business organization. A public member. A state agency or department director. A member with large-scale public works financing expertise. An economist accomplished in interpreting the state's economy. 1.Two members appointed by the Assembly Speaker: A member with transportation expertise. A member with natural resources and conservation expertise. 1.Two members appointed by the Senate Rules Committee: A member with education infrastructure financing expertise. A member with housing, urban planning, or financing CONTINUED SB 907 Page 4 expertise. The Governor appoints the Commission's chair who serves full-time at a salary of up to $150,000 annually. The Commission's vice chair is the State Treasurer (or designee). The other Commissioner members may receive a per diem of $50, not to exceed $300 a month, plus travel and other expenses. The Commission's chair appoints the executive director who receives a salary of up to $150,000 annually. The executive officer must examine ways to borrow staff from state and local governments and private nonprofit organizations, subject to the Commission's approval and direction. The Commission can ask experts for help. The Commission may delegate contracting authority to its staff, subject to relevant state law. This bill requires the Commission's products to incorporate opportunity for public comment and participation. The Commission's chair must appoint at least five task force committees to assess, inventory, and report on long-term needs and financing alternatives: Planning and financing. Transportation. Housing. Natural resources and conservation. Education. A Commission member may chair each task force committee which must also include topical experts and representatives of industry and trade groups. The chair of each task force committee must develop a work plan with deadlines, and convene meetings. Each task force committee's chair must present its findings to the Commission. This bill becomes operative only if the Legislature appropriates funds through the Budget Act to support the Commission. This bill declares that the Legislature will appropriate funds for the Commission's operating costs. This bill indicates that funds will be appropriated from the existing California Debt and Investment Advisory Commission fund. CONTINUED SB 907 Page 5 This bill contains five legislative findings and declarations regarding California's population growth and the need to plan for infrastructure. Background State law intends the Governor's Environmental Goals and Policy Report to be a "clear framework" for statewide functional plans and capital spending. A 1992 OPR study, Statewide Plan Coordination in California , identified over two dozen state functional plans that affect growth management, including plans for coastal resources (California Coastal Commission), energy supplies (California Energy Commission), housing (Department of Housing and Community Development), transportation (Department of Transportation), and water resources (Department of Water Resources), among others. As part of the annual state budget proposal, the Governor must submit a five-year infrastructure plan to the Legislature. This annual, five-year plan must identify: Infrastructure projects requested by state agencies. Transportation projects identified in the State Transportation Improvement Program. K-12 school infrastructure needs. Higher education facility needs. The plan must estimate the costs of those infrastructure projects. The plan must also identify the criteria and priorities for funding infrastructure, funding sources, the effect on the state government's debt position, and recommend specific projects for funding and capital outlay appropriations (AB 1473, Hertzberg, 1999). The criteria for selecting state agencies' infrastructure projects must be consistent with the state planning priorities adopted in 2002. The State Department of Finance issued the California Five-Year Infrastructure Plan in 2002, 2003, 2006, 2007, and 2008. The Department intends to issue a new five-year plan in January 2012. Governor Schwarzenegger issued the California Strategic CONTINUED SB 907 Page 6 Growth Plan in 2007 and 2008, laying out the state's infrastructure requirements for the next two decades. The 2008 edition proposed $48.1 billion in general obligation bonds and $2.3 billion in lease-revenue bonds to cover projects through 2016. The U.S. Census counted 37.3 million Californians in April 2010. According to a projection prepared by the State Department of Finance in 2007, the state may reach almost 60 million residents by 2050. Not only will California's population grow, it will also see demographic changes involving aging, immigration, race, and ethnicity. Settlement patterns may also change as established communities become denser. By any measure, Californians will need more housing and the public works that serve them. Prior Legislation AB 2579 (Evans, 2010) which died in the Assembly Appropriations Committee. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee: Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund New Commission $650 $350 Special* * California Debt and Investment Advisory Commission Fund (specified in the bill). SUPPORT : (Per Senate Governance & Finance Committee analysis - unable to reverify at time of writing) State Treasurer Bill Lockyer American Council of Engineering Companies American Society of Civil Engineers-Region 9 Associated General Contractors of California Chapters California Alliance for Jobs CONTINUED SB 907 Page 7 California Tax Reform Association California's Coalition for Adequate School Housing Engineering and Utility Contractors Association Self-Help Counties Coalition Transportation California AGB:nl 5/27/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED